To save money, governments are turning many tasks over to companies

The courtroom looks like any other. A judge listens as two lawyers argue their cases; an American flag stands to one side of the bench and a Bible is handy for swearing in witnesses. But while the legal disagreement is ordinary enough, the courtroom is not run by any government. Instead, it is operated by a Philadelphia company called Judicate, Inc. For fees that average about $600, Judicate issues opinions in such noncriminal cases as personal-injury suits and contract disputes. The decisions of the firm's judges, all of whom have retired from the public court system, are either binding or not,...